KULIM

BUSINESSES

KULIM | BUSINESSES

As the plantation wing of Johor Corporation, Kulim still faced significant headwinds, with Financial Year 2017 (FY2017) a mixed bag of results for Kulim whilst benefitting from improved commodity prices in 2017. Within the Group, it was a tough year for Oil and Gas (O&G) Division that resulted in lower contribution to Kulim’s revenue an increasingly challenging and rapidly changing environment in 2017, Kulim(Malaysia) Berhad (Kulim) has been resilient to weather all circumstances with sound business acumens and solid strategies. 

2017 was a bumper year for Kulim’s plantation operations given the more favourable weather conditions, a relatively more stable workforce in combination with various initiatives to boost productivity. During the year under review, Group’s operations in Malaysia (Kulim & Johor Corporation’s estate) produced a total of 1,159,769 tonnes of Fresh Fruit Bunches (FFB), a 18.13% increase from 981,734 tonnes produced in 2016. This brought the Yield Per Hectare (YPH) increased to 23.92 tonnes in 2017 from 20.75 tonnes recorded in the previous year. The Group’s FFB performance was by far superior as compared to the average yield achieved by the Industry in Johor as well as Peninsular Malaysia, which stood at 20.66 tonnes and 18.70 tonnes respectively.
 
Kulim has been involved in the pineapple industry since 1994. The MD2 pineapple farms production run by Kulim Pineapple Farm (KPF) which located at Ulu Tiram, Johor. As at 31 December 2017, Kulim has some 200.15 hectares planted with the premium MD2 variety of pineapples. Total production of pineapples in 2017 amounted to 2,176 tonnes of this, 83% were sold domestically with the remainder exported to countries such as the Middle East, South Korea and Europe. Marketed under the brand name of Melita, the demand for MD2 pineapples in both local and overseas markets is good.

Plantation

Kulim is recognized as one of the leading palm oil groups with operations currently spanning over Malaysia & Indonesia. Kulim was amongst the earliest palm oil producers to be certified to the Roundtable on Sustainable Palm Oil (“RSPO”) standard. Our management and growth strategy is fundamentally guided by “Vision 30:30”, which aims to raise fruit yields to 30 tonnes per hectare and palm product extraction rates to 30%, balanced with sustainable development principles.

Intrapreneur Ventures

Established as one of Kulim’s principal growth thrust, Intrapreneur Ventures (“IV”) Division is involved in a diverse range of businesses including support operations for plantations, biofertilizer, agricultural machinery, oil palm nursery and mills maintenance, as well as IT-related and insurance broking services. These companies will be developed and nurtured, with the aim to subsequently transform into strategic business divisions of the Group.

Oil and Gas (O&G)

Driven by its Balanced Business Strategy, Kulim is uncovering opportunities in a new business dimension - Oil and Gas (“O&G”) sector in the quest for business growth and value deliverance to its shareholders. Having footholds in O&G related businesses such as transportation of clean petroleum products and fabrication of O&G pipelines, Kulim aims at moving up the O&G value chain to expand into upstream O&G activities such as exploration, development and production, particularly in Indonesia as new space is being created. This enables us to tap into strategic investment opportunities that will broaden our earnings base and generate sustainable growth.

Agrofoods

Kulim’s Agrofoods business includes cattle-rearing and pineapple planting. The choice for cattle-rearing is in view of high local demand while pineapple has high marketability worldwide, in addition to the Kulim Group’s contribution towards national food security programme.

Business Strategy

Our business portfolio is a progressive development from our traditional business of palm oil, pursued in line with our aim to sustain value creation for all our stakeholders via the adoption of an evolving and balanced business mix. While plantation and agriculture will dominate our business profile, we will continue to explore, identify and invest in businesses that offer superior long-term potential for growth and profitability, with the aim to minimise earning fluctuations so as to enable the Group to provide attractive returns to our shareholders. Kulim is confident in carving a new growth path with its experience and proven ability to develop businesses, including those outside its traditional palm oil business. Our pursuit of value and growth is firmly underpinned by our commitment to embrace sustainability and strong corporate governance as the overriding philosophy.